Asst. Commissioner of Income tax Cir. 2, Belgaum V. KLE Unversity, Belgaum

ITA 61/PAN/2013

• Counselvise Citation: 6124114 RSA 2013
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHA DESAI
• Keywords: Charitable institution; Cancellation of registration
• Section: 133(6); 12A; 12AA; 11; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 60 & 61 /PNJ/2013 (ASSESSMENT YEAR S - 2008 - 09 & 2009 - 10 ) THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 2, 3 RD FLOOR, KHIMAJIBHAI COMMERCIAL COMPLEX OPPOSITE CIVIL HOSPITAL, DR. AMBEDKAR ROAD, BELGAUM. (APPELLANT) VS. KLE UNIVERSITY, NEHRU NAGAR, BELGAUM , PAN: AABTK0881E (RESPONDENT) APPELL ANT BY : SMT. ASHA DESAI, DR , R ESPONDENT BY : MR. PRAKASH G. GHALI , CA MR. PRAVEEN P. GHALI, CA DATE OF HEARING : 20/08 /2013 DATE OF ORDER : 31 / 10 /2013 O R D E R PER: D.T.GARASIA (JM) BOTH THE APPEALS ARE FILE BY THE DEPARTMENT AGAINST THE COMMON ORDER O F CIT(A) - 2, DATED 30/10/2012 , FOR ASSESSMENT YEAR 20 08 - 09 & 2009 - 10 . 2. THE FOLLOWING COMMON G ROUNDS ARE RAISED BY THE DEPARTMENT WHICH READ AS UNDER: (I) WHETHER THE LEARNED CIT(A), ON FACTS AND IN LAW IS RIGHT IN HOLDING THAT THE ASSESSEE UNIVERSITYS ACTIVITIES ARE CHARITABLE WITHIN THE MEANING OF SECTION 2(15) OF THE I.T. ACT, 1961, EVEN THOUGH THE EVIDENCES BROUGHT ON RECORD TO PROVE THAT HE KLE UNIVERSITY THROUGH KLE SOCIETY HAS INDULGED IN ACTIVITIES WHICH ARE AGAINST THE PUBLIC POLICY SUCH AS COL LECTION OF CAPITAL FEE? (II) WHETHER THE LEARNED CIT(A) ON FACTS AND IN LAW IS RIGHT IN HOLDING THAT THE ASSESSING OFFICER IS WRONG IN REJECTING CLAIM OF EXEMPTION U/S. 11&12 OF THE I.T. ACT. ? (III) WHETHER LEARNED CIT(A) ON FACTS AND IN LAW IS JUSTIFIE D IN HOLDING THAT THE ASSESSING OFFICER DOES NOT HAVE POWERS U/S - 133(6) OF THE ACT TO ENQUIRE INTO DONATION RECEIVED BY THE KLE SOCIETY, WHICH IS A SPONSORING SOCIETY OF THE KLE UNIVERSITY ? 2 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY (IV) WHETHER THE LEARNED CIT(A) ON FACTS AND IN LAW, IS JUSTIFIE D NOT TAKING INTO CONSIDERATION THE HONBLE SUPREME COURTS FINDINGS IN THE CASES OF DURGA PRASAD MORE (82ITR 540) AND SUMATI DAYAL V. CIT(214 ITR 801), WHEREIN, IT WAS HELD THAT THE CONSIDERATION OF SURROUNDING CIRCUMSTANCES AND THE APPLICATION OF TEST OF HUMAN PROBABILITY HAS TO BE SEEN AND WHETHER THE CIT(A) IS CORRECT IN NOT TAKING INTO CONSIDERATION THAT THE CAPITATION FEE TAKEN DIRECTLY OR INDIRECTLY IS ILLEGAL AND PROHIBITED BY LAW ? (V) WHETHER THE LEARNED CIT(A) ON FACTS AND IN LAW IS JUSTIFIED IN HOLDING THAT NO NEXUS WAS ESTABLISHED BETWEEN THE DONATIONS RECEIVED BY THE ASSESSEE (KLE SOCIETY) AND THE ADMISSIONS OF STUDENTS TO THE COURSE IN THE COLLEGES OF KLE UNIVERSITY, WHICH IS CONTRARY TO THE EVIDENCES GATHERED BY THE ASSESSING OFFICER ? (VI) WHETHER THE LEARNED CIT(A) ON FACTS AND IN LAW IS RIGHT IN NOT CONSIDERING THE RATIO OF VARIOUS DECISIONS OF THE HONBLE SUPREME COURT RELIED UPON BY THE ASSESSING OFFICER IN REGARD TO COLLECTION OF EXORBITANT MONEY OR CAPITATION FEES COLLECTED ILLEGA LLY IN THE GUISE OF RUNNING THE EDUCATIONAL INSTITUTION ? (VII) WHETHER THE LEARNED CIT(A) ON FACTS AND IN LAW IS CORRECT IN HOLDING THAT JUDGEMENT OF THE ITAT HYDERABAD BENCH, IN THE CASE OF VODITHALA EDUCATION SOCIETY (20 SOT 353 (HYD) WAS NOT APPLICABL E TO THE FACTS OF THE CASE OF THE ASSESSEE ? (VIII) WHETHER ON FACTS AND IN LAW THE LEARNED CIT(A) IS CORRECT IN HOLDING THAT THE ASSESSEE DID NOT EXIST FOR PROFIT MOTIVE ? (IX) WHETHER THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE EVIDENCES COLLECTED BY THE DEPARTMENT WERE NEITHER RELIABLE NOR HAD ANY EVIDENTIARY VALUE PARTICULARLY CONSIDERING THE FACT THAT THE ASSESSEE HAD NOT ASKED CROSS EXAMINATION OF THE DONORS AND THAT THE ASSESSEE HAD NOT CHALLENGED THE FACT THAT THE DONATIONS WERE MADE BY THE PERSONS TAKING ADMISSIONS IN KLE UNIVERSITY ? (X) WHETHER ON FACTS AND IN LAW, THE CIT(A) WAS RIGHT IN COMING TO THE CONCLUSION THAT THE KLE SOCIETY AND THE KLE UNIVERSITY ARE TOTALLY SEPARATE, DIFFERENT AND DISTINCT ENTITIES, WHEN THE F ACTS BROUGHT ON RECORD REVEALED THAT THE ENTIRE AFFAIRS OF THE KLE SOCIETY AS WELL AS KLE UNIVERSITY AND ITS INSTITUTION ARE SUPERVISED AND CONTROLLED BY THE CHAIRMAN OF THE KLE SOCIETY I.E., ASSESSEE AND 4 MEMBERS OF THE MANAGEMENT BODY OF THE KLE UNIVERS ITY BELONG TO THAT OF KLE SOCIETY ? (XI) WHETHER THE CIT(A) IS RIGHT IN HOLDING THAT THERE WAS NO ENABLING PROVISION UNDER THE INCOME TAX ACT, 1961 TO HOLD ANY RECEIPT OF DONATION FOR ADMISSION TO VARIOUS COURSES AS CAPITATION FEE? (XII) WHETHER THE CIT(A) ERRED ON FACTS AND IN LAW IN CONCLUDING THAT ASSESSEE HAD RECEIVED CAPITATION FEE RESTED ON IRRELEVANT MATERIAL/CONSIDERATION ? 3. THE SHORT FACTS OF THE CASE ARE AS UNDER: 3.1 THE ASSESSEE AS A DEEMED UNIVERSITY WAS ESTABLISHED ON THE 13 TH APRIL 2006 AS PER THE NOTIFICATION MINISTRY OF HUMAN RESOURCES DEVELOPMENT, GOVT. OF INDIA, UNDER THE GUIDELINES OF THE UNIVERSITY GRANT COMMISSION. AT THE TIME OF ESTABLISHMENT OF THE KLE UNIVERSITY , THE APPELLANT, AS A SEPARATE ENTITY IN THE YEAR 2006, THE KLE SOCIETY HAS TRANSFERRED TWO OF ITS EDUCATIONAL INSTITUTION I.E., JAWAHARLAL NEHRU MEDICAL COLLEGE, BELGAUM AND VISHWANATH KATTI INSTITUTE OF 3 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY DENTAL SCIENCES, BELGAUM INTO THE AMBIT OF APPELLANT UNIVERSITY. SUBSEQUENTLY, IN THE YEAR 2009, THE KLE SO CIETY HAS TRANSFERRED SIX MORE EDUCATIONAL INSTITUTIONS INTO THE AMBIT OF THE KLE UNIVERSITY, WHICH ARE AS UNDER: - (A) COLLEGE OF PHARMACY, BELGAUM. (B) COLLEGE OF PHARMACY, BANGALORE. (C) COLLEGE OF PHARMACY, HUBLI. ( D) COLLEGE OF PHYSIOTHERAPY, BELGAUM. (E ) INSTITUTE OF NURSING SCIENCES, BELGAUM AND (F ) B.M. KANKANWADI AYURVED MAHAVIDYALAYA, BELGAUM. THE ASSESSEE UNIVERSITY AND THE KLE SOCIETY ARE TWO SEPARATE AND INDEPENDENT SOCIETIES THAT ARE REGISTERED SEPARATELY UNDER THE RELEVANT ACTS . THEY ARE MAINTAINING SEPARATE BOOKS OF ACCOUNT AND FOR THE PURPOSE OF TAXATION UNDER THE INCOME TAX ACT, THEY ARE TWO DIFFERENT ASSESSEES. THE ASSESSEE UNIVERSITY AND THE KLE SOCIETY HAVE SEPARATE GOVERNING BODIES. THE ASSESSEE UNIVERSITY IS A SELF FINAN CING BODY AND DO NOT APPARENTLY DEPEND UPON THE KLE SOCIETY AND RUNS ITSELF BY COLLECTING FEES FROM THE STUDENTS. THE CHAIRMAN OF THE KLE SOCIETY IS THE CHANCELLOR OF THE KLE UNIVERSITY. THUS THE SAME PERSON IS AS THE HELM OF AFFAIRS OF BOTH THE KLE UNIVE RSITY AND THE KLE SOCIETY AND CONTROLS THE MANAGEMENT AND GOVERNING BODIES OF BOTH THE SOCIETIES. EVEN THOUGH, FOR ALL PRACTICAL PURPOSES BOTH THE SOCIETIES ARE SEPARATE AND INDEPENDENT OF EACH OTHER, IN PRACTICE, BOTH WORK IN TOGETHER WITH RESPECT TO THE ADMISSIONS OF STUDENTS INTO THE COLLEGES R UN BY THE APPELLANT - UNIVERSITY . THE ASSESSING OFFICER HAS EXAMINED THE CASE OF KLE SOCIETY, WHO IS SOCIETY OF THE ASSESSEE, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT DURING THE ASSESSMENT YEAR 2008 - 09, THE KLE SOCIETY HAS CLAIMED RS. 40.49 CRORES AS RECEIPTS TOWARDS THE CORPUS FUNDS, ALLEGEDLY RECEIVED SEVERAL RESIDENT AND NON - RESIDENTS DONORS. IN ORDER TO VERIFY THE GENUINENESS OF THE DONATIONS AND THE IDENTITY OF THE DONORS, LETTERS U/S 133(6) WERE ISSUED BY T HE ASSESSING OFFICER TO ALL THE RESIDENT DONORS AS PER THE LIST PROVIDED BY THE KLE SOCIETY. SEVERAL DONORS OF THE KLE SOCIETY HAVE CATEGORICALLY STATED THAT THE DONATIONS ARE PAID FOR ADMISSION IN THE COLLEGES (MEDICAL AND DENTAL) RUN BY THE 4 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY ASSESSEE UN IVERSITY. THE KLE SOCIETY WAS COLLECTING DONATIONS IN THE RANGE OF RS. 15 LAKHS TO RS.30 LAKHS FROM THE UNIVERSITY. THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX MADE SEPARATE ENQUIRIES THROUGH VARIOUS JURISDICTIONAL IN THE CASE OF ALLEGED DONORS WH ILE EXAMINED THE ISSUE OF RENEWAL OF REGISTRATION GRANTED U/S 80 - G TO THE KLE SOCIETY. DURING THE COURSE OF ENQUIRIES SEVERAL INSTANCES OF PAYING DONATIONS TO THE KLE SOCIETY FOR GETTING ADMISSION INTO APPELLANT - UNIVERSITY CAME TO LIGHT. THIS FACT THAT TH E KLE SOCIETY WAS COLLECTING EXORBITANT DONATIONS TOWARDS OFFERING THE MEDICAL AND DENTAL STUDENTS REVEALED IN THE 2000. DURING THE TIME THE ASSESSEE UNIVERSITY WAS NOT IN EXISTENCE AND BOTH THE MEDICAL AND DENTAL COLLEGES WERE UNDER THE AMBIT OF THE KLE S OCIETY ITSELF. FROM THE MATERIALS COLLECTED DUR ING THE COURSE OF SEARCH AND SUBSEQUENT ENQUIRIES MADE BY THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX, BELGAUM SHOWED THAT THE COLLECTION OF THE SO CALLED VOLUNTARY CONTRIBUTIONS FROM THE STUDENTS OR THEIR PARENTS WAS DIRECTLY LINKED TO THE ADMI SSIONS OF THE STUDENTS TO THE ASSESSEE UNIVERSITY. THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE KLE SOCIETY HAS COLLECTED HUGE AND EXORBITANT AMOUNTS FOR ADMISSIONS TO THE APPELLANT - UNIVERSITY. FURTHER IT IS OBSERVED THAT THERE IS DIRECT NEXUS BET WEEN THE DONATIONS OF THE KLE SOCIETY AND ADMISSIONS OF THE APPELLANT - UNIVERSITY. WHILE THE ASSESSEE HAS COLLECTED SUMS ARE MUCH HIGHER THAN THE FEE FIXED FOR THAT PARTICULARS COURSE, THE ASSESSING OFFICER HAS EXAMINED THE CLAIM OF U/S 11/12 OF THE ACT. TH E ASSESSING OFFICER HAS VOLUMINOUS INFORMATION BY CALLING FOR VARIOUS DONORS WHO HAD PAID HUGE DONATIONS. THE SUBMISSIONS WERE RECORDED. IT IS OBSERVED THAT ALL THE DONORS WERE GIVEN TO KLE SOCIETY FOR GETTING ADMISSIONS TO THEIR CHILDREN. FOR THE DONORS, THERE IS NO DIFFERENCE BETWEEN KLE SOCIETY AND KLE UNIVERSITY. REBUTTING THE EXPLANATION OFFERED BY THE ASSESSEE, THE ASSESSING OFFICER CAME TO CONCLUSION THAT THE ECONOMIC ENTITY OF THE ASSESSEE UNIVERSITY AND KLE SOCIETY IS ONE AND THE SAME AND THAT THE DONATIONS COLLECTED BY THE KLE SOCIETY ARE NOTHING BUT THE CAPITAL FEES COLLECTED FOR AND ON BEHALF OF THE UNIVERSITY. THE ASSESSING OFFICER REJECTED 5 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY THE CLAIM OF EXEMPTION U/S 11/12 OF THE ACT AND COMPLETED THE ASSESSMENT AND ASSESSING OFFICER HAS MADE THIS DONATION AS THE INCOME TAX OF THE UNIVERSITY ON PROTECTIVE BASIS. 4. THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER: 10. I HAVE PERUSED THE APPELLANTS WRITTEN SUBMISSIONS, VARIOUS DETAILS DOCUMENTS & ORDE RS FILED DURING APPELLATE PROCEEDINGS AND ALSO REFERRED TO THE ASSESSMENT ORDER AND RECORD. AS PER THE DETAILS PRODUCED IT IS SEEN THAT THE KLE SOCIETY AND KLE UNIVERSITY ARE TWO SEPARATE LEGAL ENTITIES RECOGNIZED UNDER THE INCOME TAX ACT BY SEPARATE REGIS TRATION U/S. 12A & 12AA OF IT ACT. THERE IS NOTHING ON RECORD TO SHOW INTERLINK BETWEEN DONATIONS RECEIVED BY KLE SOCIETY & ADMISSION TO KLE SOCIETY EXCEPT THAT THERE IS FEW COMMON MEMBER ON THE BOARD OF MANAGEMENT OF BOTH THE SOCIETIES. 11. IT IS ALSO BROUGHT ON RECORD THAT ON THE SIMILAR GROUNDS AS ENUMERATED IN THE AO OF A.Y. 2008 - 09 & 2009 - 10, THE CIT BELGAUM HAS CANCELLED THE REGISTRATION GRANTED U/S. 12A & 12AA OF IT ACT IN CASE OF KLE SOCIETY & KLE UNIVERSITY RESPECTIVELY. AGAINST THE SAID ORDER O F CIT BELGAUM THE APPELLANT HAS FILED APPEAL TO ITAT PANAJI BENCH AND THE JURISDICTIONAL ITAT HAS SET ASIDE THE SAID CANCELLATION ORDER PASSED BY CIT BELGAUM U/S. 12AA(3) AND RESTORED THE REGISTRATION TO RESPECTIVE SOCIETIES. THE DECISION OF THE ITAT PANAJ I ARE BASED ON THE SIMILAR DECISION OF PUNE BENCH AND CHENNAI BENCH AND ALSO APPLYING THE RATIO OF JURISDICTIONAL HIGH COURT OF KARNATAKA DECISION IN RELATIVELY SIMILAR CASES. 12. THE JURISDICTIONAL ITAT PANAJI HAS HELD THAT THE ASSESSING AUTHORITIES UND ER INCOME TAX ACT HAVE NO JURISDICTIONAL AUTHORITY TO DETERMINE THE CONTRAVENTION OF ANTI CAPITATION ACT AND THE SAID CONCLUSION OF AO THAT DONATIONS ARE CAPITATION FEES COLLECTED IN CONTRAVENTION OF ANTI - CAPITATION ACT MAKE THE ASSESSEE UNIVERSITY IN EL IGIBLE FOR EXEMPTION U/S. 11&12, IS ERRONEOUS, IRRELEVANT AND NOT TENABLE IN LAW. 13. THE HONBLE ITAT PANAJI, IN CASE OF KLE UNIVERSITY HAS HELD THAT IN THE PRESENT CASE IN APPEAL BEFORE US THE APPELLANT IS FOUND CARRYING THE GENUINE ACTIVITIES OF IMPAR TING EDUCATION AND NO PART OF ITS SURPLUS IS SHOWN TO HAVE BEEN APPLIED FOR ANY PURPOSE OTHER THAN THE EDUCATION FOR WHICH REGISTRATION OF THE ACT, U/S. 12A WAS GRANTED. THE ACTIVITIES OF THE ASSESSEE ARE ALSO FOUND CARRIED IN ACCORDANCE WITH THE OBJECTS F OR WHICH REGISTRATION WAS GRANTED U/S. 12A OF THE ACT AND NO CONDITION CONTAINED IN THE SAID REGISTRATION IS SHOWN TO HAVE BEEN INFRINGED. IN THIS VIEW OF THE MATTER LEARNED CIT, BELGAUM IS FOUND TO HAVE COMMITTED ERROR IN CANCELLING THE REGISTRATION BY WR ONGFULLY INVOKING POWERS U/S. 12AA READ WITH SECTION 239C OF THE ACT. WE THEREFORE, SET ASIDE HIS ORDER AND ALLOW THE APPEAL BY RESTORING THE REGISTRATION GRANTED U/S. 12A OF THE ACT TO THE APPELLANT. FOR THE PURPOSE OF SECTION 11,12 AND 12 THE AUTHORITIE S UNDER INCOME TAX ACT SHOULD LOOK INTO NOT THE SOURCE OF INCOME TO THE TRUST, BUT WHETHER SUCH INCOME IS APPLIED FOR CHARITABLE PURPOSE. SUCH OBSERVATION OF ITAT HAS BEEN CONSIDERED FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT OF KARNATAKA IN THE C ASE SANJEEVAMMA HANUMATHA GOUDA CHARITABLE TRUST VS. DITC (EXEMPTION) (285 ITR 327) IN ABSENCE OF ANY MATERIAL ON RECORD TO SHOW THAT WHETHER IS THE INCOME, NOT APPLIED FOR THE OBJECT OF THE TRUST, THE EXEMPTION OF INCOME U/S 11& 12 CANNOT BE REJECTED FOR KLE UNIVERSITY. 6 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY 14. FURTHER IT IS ALSO BROUGHT ON RECORD THAT THE CIT BELGAUM HAS SENT PROPOSAL TO CHIEF COMMISSIONER, PANAJI GOA FOR WITHDRAWAL OF APPROVAL GRANTED TO KLE SOCIETY U/S 10 (23C) (VI) OF IT ACT ON THE SAME GROUNDS AS ELABORATED IN THE ASSES SMENT ORDERS AND CHIEF COMMISSIONER REJECTED THE PROPOSAL ON THE GROUND THAT THERE IS NOTHING ON RECORD TO SHOW THAT KLE UNIVERSITYS ACTIVITIES ARE NOT IN ACCORDANCE WITH THE MAIN OBJECT OF THE SOCIETY AND HENCE THE ASSESSEE UNIVERSITY CANNOT BE DENIED EX EMPTION U/S. 11 & 12 OF I.T. ACT. THE CCIT, PANAJI, GOA HAS PASSED THE OFFICE ORDER ON 08 - 082012 WHERE IT IS MENTIONED THAT THE DECISION OF CIT TO CANCEL REGISTRATION U/S. 12AA(3) ON THE ABOVE BASIS WAS HELD TO BE LEGALLY NOT TENABLE. THE HONBLE ITAT, HA S RELIED UPON THE DECISION OF HONBLE ITAT, IN THE FOLLOWING CASES: (I) HONBLE ITAT., CHENNAI BENCH IN THE CASE OF M/S. PADMANILAM WELFARE TRUST V/S DCIT IN ITA NO. 444/MDS/ 2010 DATED 24/12/2010 AND (II) HONBLE ITAT., PUNE BENCH IN THE CASE OF MAHARASHTRA ACADEMY OF ENGINEERING AND EDUCATION V/S. CIT (36 DTR 321) (III) DIT V/S BELLIAMATHA MAHASAMSTHANA SOCIO CULTURAL AND EDUCATION TRUST (46DTR (KAR) 290). IN VIEW OF THE FACTS MENTION ABOVE, I AM OF THE VIEW THAT THE PROPOSAL FOR WITHDRAWAL OF E XEMPTION U/S. 10(23C) (VI) FOR THE ASSESSMENT YEAR 2008 - 09 CANNOT BE ENTERTAINED AT THIS STAGE IN VIEW OF THE FOLLOWING REASONS:. (A) THE ISSUE WITH REGARD TO CANCELLATION OF REGISTRATION U/S. 12AA(3) ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE IS PEND ING BEFORE THE HONBLE CURT. (B) THERE IS NO VIOLATION OF CLAUSE (A) OR (B) OF THE 3 RD PROVISO TO SECTION 10(23C) (VI). (C) THERE IS NOTHING ON RECORD TO SHOW THAT THE ACTIVITY OF THE SOCIETY HAS NOT BEEN CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY FOR WHICH THE EXEMPTION U/S. 10 (23C)(VI) WAS GRANTED OR INCOME HAS BEEN APPLIED FOR PURPOSE OTHER THAN OBJECTS F OR WHICH THE SOCIETY HAS BEEN ESTABLISHED. THE ABOVE FINDING ALSO APPLIED FOR THE ASSESSMENT YEAR 2009 - 10. 15. THE APPELLANT ARGUED THAT THE SUBSTANTIAL ASSESSMENTS IN CASE OF KLE SOCIETY FOR A.Y. 2008 - 09 & 2009 - 10 HAVE BEEN COMPLETED INCLUDING DONATIONS RECEIVED AND HENCE THE DONATIONS RECEIVED BY KLE SOCIETY OF RS. 1,02,75,000/ - & RS 6,75,00,000/ - FOR A.Y. 2008 - 09 &10 ADDED TO THE INCOME OF KLE UNIVERSITY ON PROTECTIVE BASIS HAVE BEEN ASSESSED SUBSTANTIALLY IN THE HANDS OF KLE SOCIETY HENCE SAME BE DELET ED. AS THE FACTS ARE EVIDENCED BY AO OF KLE SOCIETY, THE SAID ADDITION OF DONATIONS IN THE HANDS OF KLE UNIVERSITY BE DEL E TED. 16 . RESPECTFULLY FOLLOWING THE RATIO OF ABOVE REFERRED DECISIONS OF JURISDICTIONAL ITAT PANAJI & JURISDICTIONAL HIGH COURT OF KARNATAKA AND ALSO CONSIDERING THE FACT THAT THE REGISTRATION GRANTED TO KLE UNIVERSITY U/S. 12AA FOR A.Y. 2008 - 09 &2009 - 10 BEING RESTORED, THE APPELLANT UNIVERSITY IS ELIGIBLE FOR EXEMPTION OF ITS ENTIRE INCOME U/S. 11 & 12 O F IT ACT. AND HENCE AO IS DIRECTED TO REFRAME THE ASSESSMENT AFTER ALLOWING THE EXEMPTION FOR THE ENTIRE INCOME OF THE APPELLANT UNIVERSITY FOR BOTH THE A.Y. 2008 - 09 AND 2009 - 10. IN HAVE GONE THROUGH THE FACTS OF THE CASE, CONTENTS OF THE ASSESSMENT ORDER, WRITTEN SUBMISSION OF THE ASSESSEE AND CASE LAWS REFERRED AND RELIED BY THE AO AND ASSESSEE. 7 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY 18. THE HONBLE ITAT, PANAJI, IN CASE OF KLE UNIVERSITY HAS HELD THAT, IN THE PRESENT CASE IN APPEAL BEFORE US THE APPELLANT IS FOUND CARRYING THE GENUINE ACTIVI TIES OF IMPARTING EDUCATION AND NO PART OF ITS SURPLUS IS SHOWN TO HAVE BEEN APPLIED FOR ANY PURPOSE OTHER THAN THE EDUCATION FOR WHICH REGISTRATION OF THE ACT., U/S 12A WAS GRANTED. THE ACTIVITIES OF THE ASSESSEE ARE ALSO FOUND CARRIED IN ACCORDANCE WITH THE OBJECTS FOR WHICH REGISTRATION WAS GRANTED U/S. 12A OF THE ACT AND NO CONDITION CONTAINED IN THE SAID REGISTRATION IS SHOWN TO HAVE BEEN INFRINGED. IN THIS VIEW OF THE MATTER LEARNED CIT, BELGAUM IS FOUND TO HAVE COMMITTED ERROR IN CANCELLING THE REGIS TRATION BY WRONGFULLY INVOKING POWERS U/S. 12AA READ WITH SECTION 239C OF THE ACT.. WE THEREFORE, SET ASIDE HIS ORDER AND ALLOW THE APPEAL BY RESTORING THE REGISTRATION GRANTED U/S. 12A OF THE ACT TO THE APPELLANT. FOR THE PURPOSE OF SECTION 11,12 AND 13 T HE AUTHORITIES UNDER INCOME TAX ACT SHOULD LOOK INTO NOT THE SOURCE OF INCOME TO THE TRUST, BUT WHETHER SUCH INCOME IS APPLIED FOR CHARITABLE PURPOSE. SUCH OBSERVATION OF ITAT HAS BEEN CONSIDERED FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT OF KARNA TAKA IN THE CASE OF SANJEEVAMMA HANUMATHA GOUDA CHARITABLE TRUST VS. DITC(EXEMPTION) (285 ITR 327) IN ABSENCE OF ANY MATERIAL ON RECORD TO SHOW THAT WHETHER IS THE INCOME, NOT APPLIED FOR THE OBJECT OF THE TRUST, THE EXEMPTION OF INCOME U/S 11 & 12 CANNOT BE REJECTED FOR KLE UNIVERSITY. RESPECTFULLY FOLLOWING THE JURISDICTIONAL HONBLE ITAT., PANAJI, GOA JUDGEMENT THE ADDITION MADE BY THE AO IS DELETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. AS A RESULT THE APPEALS OF THE ASSESSEE FOR BOTH THE YEAR I.E . 2008 - 09 & 2009 - 10 ARE ALLOWED. 5. LEARNED D R SUBMITTED THAT THE KLE SOCIETY TO CHARGE THE CAPITATION FEE IN THE GUISE OF VOLUNTARY DONATIONS; AND THE ADMISSION HAS BEEN TAKEN BY KLE UNIVERSITY I.E., ASSESSEE KLE UNIVERSITY CHARGES THE CAPITATION FEE IN THE GUISE OF VOLUNTARY CONTRIBUTION COLLECTED BY KLE SOCIETY. THE KLE SOCIETY AND THE ASSESSEE UNIVERSITY IS MANAGED BY THE SAME ADMINISTRATOR. THE CHAIRMAN OF KLE SOCIETY IS THE CHANCELLOR OF THE KLE UNIVERSITY. THEREFO RE, IT IS COMMON ADMINISTRATION. THEREFORE, WHATEVER THE CAPITATION FEE IS COLLECTED BY KLE SOCIETY CANNOT BE CONSIDERED AS A VOLUNTARY CONTRIBUTION TO THE KLE SOCIETY BUT IT IS A CAPITATION FEE THEREFORE, ASSESSEE SOCIETY CANNOT BE GIVE THE BENEFIT OF U/S 11 & 12 OF THE INCOME TAX ACT. 1 961. THE C IT(A) WHILE DECIDING THE APPEAL, HAS DECIDED THE APPEAL ON THE GROUND THAT THE ACTIVITIES OF THE ASSESSEE ARE CHARITABLE IN NATURE AS THE REGISTRATION U/S 12A OF THE INCOME TAX ACT HAS BEEN GRANTED BY THE TRIBUNAL AND WHEN TRIBUNAL HAS GRANTED TH E REGISTRATION THE INCOME WHICH IS COLLECTED BY THE KLE UNIVERSITY CANNOT BE DENIED EXEMPTIO N U/S 12A OF THE INCOME TAX ACT. BUT ON THE FACTS OF THE CASE, THE ASSESSING OFFICER HAS COME TO 8 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY CONCLUSION THAT THE COLLECTION OF CAPITATION FEES BY THE KLE SOCIET Y TOWARDS ADMISSION IN THE COLLEGES RUN BY THE ASSESSEE SOCIETY, ACTUALLY AMOUNTS TO COLLECTION OF CAPITATION FEES BY THE UNIVERSITY ITSELF. THEREFORE, WHATEVER, THE CAPITAL FEES COLLECTED BY KLE SOCIETY CANNOT BE CATEGORIZED AS THE VOLUNTARY CONTRIBUTION S, THE ASSESSEE CANNOT BE GIVEN BENEFIT U/S 11 & 12 OF THE INCOME TAX ACT, 1961. THE CIT(A) WHILE DECIDING THE APPEAL HAS DELETED THE ADDITION ON THE GROUND THAT KLE UNIVERSITY WAS GRANTED REGISTRATION U/S 12A OF THE ACT, THEREFORE, HIS INCOME CANNOT BE C ONSIDERED AS REGISTRATION U/S 12 A IS GRANTED. THEREFORE, ASSESSEE IS ENTITLED FOR EXEMPTION U/S 12A OF THE ACT. 6. LEARNED A R HAS SUBMITTED THAT AS PER THE DECISION OF KARNAT A KA HIGH COURT, THE ASSESSEE UNIVERSITY REGISTRATION U/S 12A IS NOT TO BE REJEC TED BUT THE ASSESSING OFFICER HAS TO VERIFY WHETHER THE ASSESSEE HAS APPLIED THE INCOME OTHER THAN THE CHARITABLE PURPOSES THE PROVISIONS OF SECTION 11,12 AND 13 WHICH ARE APPLICABLE I.E., THE OBJECT NO. 14, 33 AND 34. 7. WE FIND THAT THE CIT(A) HAS N OT LOOKED INTO THE FACTS THAT THOUGH THERE WAS CLEAR CUT DIRECTION WHILE GRANTING REGISTRATION U/S 12A OF THE ACT BY THE TRIBUNAL, THE CIT HAS NOT VERIFIED THIS FACTS AND HE HAS SIMPLY FOLLOWED THE DECISION OF THE TRIBUNAL. 8. THE LEARNED DR RELIED UPON T HE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. COMMISSIONER OF INCOME TAX, 214 ITR 801, AND SUBMITTED THAT THE EVERY MATTER HAS TO BE CONSIDERED I N THE LIGHT OF HUMAN PROBABILITIES IS THAT KLE SOCIETY IS NOT RUNNING THE UNIVERSITY, BUT THE ADMISSION IS GIVEN BY KLE UNIVERSITY. T HEREFORE, WHATEVER, DONATION HAS BEE N RECEIVED BY THE KLE SOCIETY AND CAPITATION FEES COLLECTED BY THE UNIVERSITY AND IN THIS CASE THE ASSESSEE HAS COLLECTED THE DONATION AS PER THE INVESTIGATION CARRIED BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSEE INCOME CANNOT BE CONSIDERED AS 9 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY VOLUNTARY CONTRIBU TION AND CIT(A) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF ASSESSEE. 9. THE LEARNED AR RELIED UPON THE ORDER OF CIT (A) AND THE AR SUBMITTED THAT THE UNIVERSITY HAS BEEN GRANTED REGISTRATION U/S 12A OF THE ACT AND THE ASSESSING OFFICER HAS ASSESSED THE DONATION RECEIVED BY KLE SOCIETY IN THE HANDS OF DEEMED UNIVERSITY ON PROTECTIVE BASIS. THE KLE SOCIETY REGISTRA TION U /S 12A HAS BEEN GRANTED BY ITAT, PANAJI BENCH. THE KLE SOCIETY WAS GRANTED EXEMPTION SECTION 11& 12 OF THE ACT AND THE DONATION RECEIVED BY THE ASSESSEE WAS DELETED. THEREFORE, THE CIT(A) IS JUSTIFIED IN HIS ACTION AND REVENUES APPEAL MAY BE DISMISS ED. 10 . THUS, WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE P ARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, W E FIND FROM THE CIT(A)S ORDER THAT CIT(A) HAS RELIED UPON THE DECISIONS OF TRIBUNAL IN THE CASE OF ASSESSEE AND IN THE CASE OF KLE SOCIETY TRUST. WE FIND THAT THE COMMISSIONER OF INCOME TAX (A) HAS DELETED THE ADDITION IN THE HANDS OF ASSESSEE ON THE GROUND THAT THE REGISTRATION UNDER 12A OF THE ACT HAS BEEN GRANTED BY TRIBUNAL IN THE CASE OF KLE UNIVERSITY AND KLE SOCIETY TRUST. WE FIND THAT WHILE DECIDING THE APPEAL , THE CIT ( A) HAS NOT GIVEN ANY FINDING WHEREIN THE AO HAS SPECIFICALLY HELD IN PARA 4.6 .6 WHICH READ AS UNDER. 4.6.6 THUS, BY LIFTING THE VEIL OF THE SOCIETIES IN QUESTION, I HOLD THAT THE ECONOMIC ENTITY OF THE ASSESSEE - UNIVERSITY AND THE KLE SOCIETY IS ONE AND THE SAME. FURTHER, I HOLD THAT THE DONATIONS COLLECTED BY THE KLE SOCIETY ARE NOTHING BUT THE CAPITATION FEE COLLECTED FOR AND ON BEHALF OF THE ASSESSEE - UNIVERSITY AND ACCORDINGLY, THE SAME IS TAXABLE IN THE HANDS OF THE UNIVERSITY. FROM THIS ABOVE PARAGRAPH IT IS AMPLY CLEAR FROM THE EVIDENCE THAT WHATEVER DONATIO N HAS BEEN COLLECTED BY THE KLE SOCIETY , WAS GIVEN ADMISSION IN KLE UNIVERSITY. THEREFORE, IN THE INTEREST OF JUSTICE IT IS NECESSARY FOR CIT(A) TO DECIDE WHETHER ANY DONATION HAS BEEN COLLECTED BY KLE SOCIETY IS THE INCOME OF THE KLE UNIVERSITY OR NOT. 10 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY 11 . WE HAVE ALSO TAKEN THE NOTE OF D EPARTMENTS OBJECTION THAT KLE UNIVERSITY AS CHARITABLE IN NATURE AS PER SECTION 2 ( 15 ) OF INCOME TAX ACT 1961 BUT AS THE ASSESSEE KLE SOCIETY HAS ADMITTED THE FACTS THE SO CALLED DONATION HAS BE EN COLLECTED BY THE KLE SOCIETY. T HE ASSESSMENT ORDER OF THE KLE SOCIETY WHEREIN THE KLE SOCIETY HAS NOT ASKED FOR ANY CROSS EXAMINATION OF SO CALLED 22 DONORS AND THEY HAVE SIMPLY RELIED UPON THE DECISION OF ITAT IN RESPECT OF KLE SO CIETY IN ITA NO. 149 /PAN/ 2011. I N OUR OPINION , THE TRIBUNAL HAS DECIDED THE ISSU E WHETHER THE ASS ESSEES REGISTRATION U/S 12A IS TO BE REJECTED ON THE EVIDENCE OF 22 DONATION COLLECTED BY THE KLE UN IVERSITY. THE TRIBUNAL IN TH IS JUDGMENT WHERE ONE OF US IS A PARTY TO THE DECISION H AS HELD THAT 12A REGISTRATION CANNOT BE REJECTED UNLESS AND UNTIL THE OUTCOME OF THE ENQUIRY BECOMES FINAL. THE TRIBUNAL WHILE DECIDING THE APPEAL HAS RELIED UPON THE VARIO US TRIBUNAL DECISIONS BUT IN OUR OPIN ION WHILE DECIDING THE ASSESSMENT ORDER WHILE DECIDING THE INCOME THE TRIBUNAL IS BO UND TO CONSI DER THE DECISION S OF VARIOUS HIGH COURT PARTICULARLY , WE HAVE FO U ND THE DECISION IN THE CASE OF P.S. GOVINDASAMY NAIDU & SONS VS. ACIT 324 ITR 44 DECIDED BY THE MADRAS HIGH COURT, AND MADRAS HIGH COURT IN THAT CASE HAS HELD THAT ASSESSING AUTHORITY ON AN EXAMINATION OF RANDOM NUMBER OF P ARENTS WHO ADMITTED THE CHILDREN INTO THE COLLEGE, FOUND THAT THE AMOUNT PAID WAS COLLECTED ONLY BY WAY OF CAPITATION FEES; EVEN THOUGH THE ASSESSEE TREATED IT ON ITS OWN AS CORPUS DONATION ; ISSUED REC EIPT AS CORPUS DONATI ON AND CREDITED IT UNDER THE CORPUS DONATION ACCOUNT. THE ASSESSING AUTHORITY HAS FORMED HIS OPINION THAT THE AMOUNT COLLECTED WAS IN THE NATURE OF CAPITATION FEE BASED ON THE CIRCUMSTANCES, AND THE HONBLE MADRAS HIGH COURT HAS APPROVED SUCH AN OPINION. THEREFORE, IN OUR OPINION, THE DECISION OF TRIBUNAL WILL NOT BE HELPFUL TO THE ASSESSEE. WE HAVE GONE THROUGH THE DECISIONS OF VARIOUS HIGH COURTS AND SUPREME COURT WHEREIN IT IS HELD THAT IF ANY DONATION IS RECEIVED AGAINST THE LAW THEN IT CANNOT BE REG ARDED AS VOLUNTARY CONTRIBUTION. 11 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY 12. IN THE INSTANT CASE, THE CIT(A) HAS NOT GIVEN ANY FINDING WHETHER ANY NEXUS BETWEEN KLE SOCIETY AND ASSESSEE DONATION RECEIVED BY THE ASSESSEE AND ADMISSION OF STUDENTS TO THE COURSE OF THE COLLEGE UNIVERSITY AND THE CIT(A) HAS SIMPLY RELIED UPON THE DECISION OF TRIBUNALS REGARDING REGISTRATION U/S 12A OF THE ACT. IN OUR OPINION, THE CIT(A) HAS HELD THAT THERE IS NO PROVISION UNDER THE INCOME TAX ACT . TO HO LD THAT RECEIPT OF DONATION OR ADMISSION OF VARIOUS COURSE S AS CAPITAT ION FEES BUT IN OUR OPINION THE CIT(A) HAS IN THIS PROPOSITION RELIED UPON THE DECISION OF THE TRIBUNAL BUT THERE IS DECISION OF HONBLE MADRAS HIGH COURT ON THIS ISSUE, NOW. T HE REFORE, IT IS NECESSARY FOR CIT(A) TO GIVE A CLEAR CUT FINDING CON SIDERING THE DECISION OF VARIOUS HIGH COURTS. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS BACK TO THE FILE OF THE CIT(A) TO DECIDE WHETHER THERE IS ANY NEXUS BETWEEN KLE UNIVERSITY AND KLE SOCIETY AND ADMISSION OF STUDENT S TO COURSE OF KLE UNIVERSITY. WE ARE ALSO OF THE VIEW THAT IT IS NECESSARY FOR THE CIT(A) TO DECIDE WHETHER KLE SOCIETY AND KLE UNIVERSITY ARE TOTALLY SEPARATE DIFFERENT AND DISTINCT ENTITY WHEN THE FACTS BROUGHT ON RECORD REVEALS THAT THE ENTIRE FACTS OF THE KLE SOCIETY AS WELL AS KLE UNIVERSITY AND THIS INST ITUTIONS ARE UNDER SUPERVISION AND CONTROL OF THE CHAIRMAN OF KLE SOCIETY, ASSESSEE AND FOUR OTHER MEMBERS OF MANAGEMENT BOARD OF THE KLE SOCIETY BELONGS TO KLE UNIVERSITY AND KLE SOCIE TY. WE ARE OF T HE VIEW THAT THESE F ACTS ARE NECESSARY TO BE LOOKED INTO FOR DECIDING THE APPEAL ON MERIT. WE ARE ALSO OF THE VIEW THAT IT IS SETTLED LAW THAT IN MATTERS OF TAXATION, THE FORM IS NOT ALWAYS CONCLUSIVE. THE SUBSTANCE MUST BE LOOKED AT IN ORDER TO ASCERT AIN THE REAL NATURE OF THE TRANSACTION. WHILE DEALING WITH CHARITIES, IT IS ALL THE MORE NECESSARY TO ASCERTAIN THE SUBSTANCE OF THE TRANSACTION RATHER THAN MERELY LOOK AT THE DISGUISED FORM. THEREFORE, IT IS NECESSARY IN THIS CASE WHETHER VOLUNTARY DON ATION, OR CAPITATION FEES AND IF IT IS CAPITATION FEES, THE ASSESSEE IS NOT ENTITLED FOR BENEFIT U/S 11/12 OF THE INCOME TAX ACT. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE TO THE FILE OF CIT(A) TO DECIDE THE ISSUE AFRESH KEEPING IN VIEW THE DECISION S OF HONBLE SUPREME COURT IN THE CASE OF 12 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY SUNIL SIDDHARTHBHAI VS. CIT(1985) 156 ITR 509, AND IN THE CASE OF VODITHALA EDUCATION SOCIETY HYDERABA D VS. ADIT (EXEMPTIONS) 020 SOT 0353 (HYDERABAD), AND IN THE CASE OF P.S. GOVINDASAMY NAIDU & SONS VS. ACIT (2010) 324 ITR 44, MADRAS HIGH COURT . 13 . WE FURTHER NOTED THAT THE TRIBUNAL IN ITA NO. 149/P NJ/2011 FOR ASSESSMENT YEAR 2008 - 09, AND ITA NO. 09 & 10/PNJ/2012 FOR ASSESSMENT YEAR 2008 - 09 & 2009 - 10, DIRECTED TO GRANT REGISTRATION U/S 12AA(3 ) WITH FOLLOWING DIRECTION S . THE DECISION OF THE KARNATAKA HIGH COURT IS BINDING ON US AND ACCORDINGLY WE HOLD THAT THE COMMISSIONER OF INCOME TAX HAS TO LOOK INTO THE APPLICATION OF THE INCOME NOT THE SOURCE OF INCOME IF THE INCOME HAS BEEN APPLIED FOR THE CHARITABLE PURPOSE AS ENUMERATED IN THE BY LAWS THE REGISTRATION CANNOT BE CANCELLED. IN CASE REVENUE FIND THAT THE ASSESSEE HAS APPLIED HIS IN COME OTHER THAN THE CHARITABLE PURPOSE THE PROVISIONS OF SECTION 11,12 AND 13 WILL CLEARLY BE APPLICABLE I.E., THE OBJECT NO. 14,33 AND 34. LOOKING TO THE ABOVE DIRECTIONS THE AS SESSING OFFICER HAS TO VERIFY WHETHER THE ASSESSEE HAS APPLIED HIS INCOME FOR OTHER THAN CHARITABLE PURPOSE WHETHER THE PROVISIONS OF SECTION 11,12 AND 13 ARE CLEARLY APPLICABLE OR NOT, THE ASSESSING OFFICER SHOULD VERIFY THE SAME. WE FIND THAT KARNATAKA HIGH COURT IN THE CASE OF GARDEN CITY EDUCATIONAL TRUST 191 TAXMA N 238 JURI SDICTIONAL HIGH COURT HAS HELD AS UNDER: SECTION 12A, READ WITH SECTIONS 2(15), 11 AND 12, OF THE INCOME TAX ACT, 1961 - CHARITABLE OR RELIGIOUS TRUST - REGISTRATION OF WHETHER SO LONG AS A TRUST HAS EDUCATION AS ONE OF ITS OBJECTS WHICH IS ONE OF ENUMER ATED HEADS WHICH QUALIFIES AND COMES WITHIN SCOPE OF CHARITABLE PURPOSE AS ENUMERATED IN SECTION 2(15), IT HAS TO BE ACCEPTED THAT TRUST IS HAVING A CHARITABLE PURPOSE AS ITS OBJECT AND MAY QUALIFY FOR CLAIMING EXEMPTION IN TERMS OF SECTIONS 11 AND 12 SUBJ ECT TO FULFILLING CONDITIONS ENUMERATED THEREIN AND, IF SO, GRANT OF REGISTRATION, SO LONG AS PROCEDURAL REQUIREMENTS ARE COMPLIED WITH, IS INEVITABLE - HELD, YES - WHETHER MANNER OF APPLICATION OF FUNDS AND AS TO WHETHER ASSESSEE CAN CLAIM BENEFIT OF EXEMPTI ON IN TERMS OF SECTIONS 11 AND 12 ARE QUESTIONS WHICH HAVE TO BE EXAMINED BY ASSESSING OFFICER AT STAGE WHEN IT IS URGED AND NOT BY COMMISSIONER WHILE CONSIDERING APPLICATION FOR GRANT OF REGISTRATI ON UNDER SECTION 12A - HELD, YES. AS THE ABOVE DECISION IS BINDING ON US WHICH SPECIFICALLY SAYS THAT ASSESSING OFFICER HAS TO VERIFY WHETHER THE ASSESSEE TRUST HAS APPLIED HIS INCOME FOR OBJECT 13 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY OF TRUST OR NOT AND THE CAPITATION FEE COLLECTED BY KLE UNIVERSITY IS A VOLUNTARY CONTRIBUTION OR NOT THAT HAS TO BE EXAMINED BY THE CIT(A). WE FIND THAT CIT(A) IN ITS ORDER HAS DELETED THE ADDITION ON THE BASIS OF REGISTRATION GRANTED U/S 12A OF THE ACT. BUT WE ARE OF THE VIEW THE CIT(A) SHOULD EXAMINE THE ISSUE IN DETAIL AND HE SHOULD GIVE THE IND EPENDENT FINDING ON IT WITHOUT GETTING INFLUENCED BY THE ORDER OF THE TRIBUNAL PASSED IN APPEAL RELATING TO U/S 12A . THEREFORE, WE SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THIS APPEAL TO THE FILE OF CIT(A) TO DECIDE THE ISSUE AFRESH. 1 4 . IN THE RESUL T, APPEALS OF THE DEPARTMENT ARE ALLOWED AND CIT (A) IS DIRECTED TO PASS SPEAKING ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10. 2013. SD/ - SD/ - ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 31.10 .2013 P.S. - *PK* COPY TO : ( 1 ) APPELLANT ( 2 ) RESPONDENT ( 3 ) CIT CONCERNED ( 4 ) CIT (A) ( 5 ) D.R ( 6 ) GUARD FILE TRUE COPY, BY ORDER PRIVATE SECRETARY, ITAT, PANAJI, GOA 14 ITA NO. 61&62 PNJ 2013(A.Y. 2008 - 09 & 2009&10) ACIT VS. KLE UNIVERSITY